Correlation Between MAG Silver and Cairo Communication
Can any of the company-specific risk be diversified away by investing in both MAG Silver and Cairo Communication at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining MAG Silver and Cairo Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG Silver Corp and Cairo Communication SpA, you can compare the effects of market volatilities on MAG Silver and Cairo Communication and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in MAG Silver with a short position of Cairo Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and Cairo Communication.
Diversification Opportunities for MAG Silver and Cairo Communication
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between MAG and Cairo is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and Cairo Communication SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairo Communication SpA and MAG Silver is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on MAG Silver Corp are associated (or correlated) with Cairo Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairo Communication SpA has no effect on the direction of MAG Silver i.e., MAG Silver and Cairo Communication go up and down completely randomly.
Pair Corralation between MAG Silver and Cairo Communication
Assuming the 90 days horizon MAG Silver is expected to generate 3.2 times less return on investment than Cairo Communication. In addition to that, MAG Silver is 1.66 times more volatile than Cairo Communication SpA. It trades about 0.01 of its total potential returns per unit of risk. Cairo Communication SpA is currently generating about 0.07 per unit of volatility. If you would invest 128.00 in Cairo Communication SpA on October 11, 2024 and sell it today you would earn a total of 109.00 from holding Cairo Communication SpA or generate 85.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG Silver Corp vs. Cairo Communication SpA
Performance |
| Timeline |
| MAG Silver Corp |
| Cairo Communication SpA |
MAG Silver and Cairo Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG Silver and Cairo Communication
The main advantage of trading using opposite MAG Silver and Cairo Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver position performs unexpectedly, Cairo Communication can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cairo Communication will offset losses from the drop in Cairo Communication's long position.| MAG Silver vs. Aegean Airlines SA | MAG Silver vs. ASURE SOFTWARE | MAG Silver vs. Axway Software SA | MAG Silver vs. FORMPIPE SOFTWARE AB |
| Cairo Communication vs. International Consolidated Airlines | Cairo Communication vs. Aegean Airlines SA | Cairo Communication vs. Ares Management Corp | Cairo Communication vs. Coor Service Management |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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